Systems for processing accounts payable records are known in the art. Such systems allow a clerk to enter an invoice or other record that is received from a supplier of goods and services so that authorization of payment of the invoice can be performed. For example, the accounts payable system can verify that the invoice matches the goods ordered on a purchase order, can allocate expenses to appropriate accounts, post the accounting entries to a General Ledger, and optionally require approval for payment.
Although such accounts payable systems have improved the processing of invoices and reduced the risk of fraud or improper payments, one area of weakness for such accounts payable systems relates to the validation of transaction based taxes, including sales tax, consumers use tax and international VAT. For example, within the United States, if a seller or provider of goods or services is registered to collect tax in the jurisdiction in which the transaction occurs, then the seller must charge the buyer the applicable taxes and remit such taxes to the taxing jurisdiction. However, if the buyer provides the seller with a valid exemption certificate, then the seller has no obligation to charge the buyer any applicable taxes. Examples of exemption certificates include manufacturing exemptions and resale exemptions where the transaction is exempt from tax, as well as direct pay certificates whereby the buyer is responsible for remitting the tax directly to a taxing jurisdiction. If the seller is not registered to collect tax in the particular jurisdiction in which the transaction occurs, then the consumer, or buyer of the goods and services, may need to self-accrue tax and remit such taxes directly to the taxing jurisdiction instead of the supplier. Furthermore, individual product and service taxability varies widely across taxing jurisdictions, thus a product or service may be taxable in one state, but exempt in another, or taxed at a basis of less than 100 percent. For countries outside of the United States, the variability with respect to whether the vendor should charge VAT or the buyer of goods should self-assess VAT depend on whether the buyer and/or seller are registered for VAT within the country, whether the transaction involves triangulation across multiple countries, whether a commissionaire structure is involved, or whether the purchase relates to services, just to name a few conditions. Thus, given all the variability in who is responsible for remitting the tax, what is taxable vs. non-taxable, and the fact that tax rates and legislation changes on a monthly basis, it is very difficult for non-tax personnel such as accounts payable clerks to correctly validate vendor charged tax, and/or decide to manually accrue tax which should be paid directly to the taxing jurisdiction. The clerks performing data entry into the accounts payable system lack the knowledge and training to determine how tax should be applied. As such, it is often necessary for businesses to perform periodic audits of tax payments that have been made by hiring trained tax auditors to review annual tax payments to identify overpayments and underpayments. With respect to tax overpayments, tax auditors will typically agree to perform these audits for a percentage of the tax savings resulting from the refund of overpaid taxes.